As reported by Game Politics, the suit was filed by Threshold Entertainment, the production company of Hollywood producer Larry Kasanoff. The producer alleges that he signed an agreement with Midway in 1993 that gave him a perpetual and exclusive license to make films and TV shows based on Mortal Kombat, and the suit was filed to ensure those rights aren't unduly transferred to another party in the course of Midway's bankruptcy proceeding.

While Kasanoff's original agreement with Midway does not articulate those rights in that wording, the producer claims that the combination of rights it did state explicitly amount to the same thing. The clauses pointed to by the suit are the right "to represent the Property" to develop "a feature film and television series based thereon," and the right "to be attached to such feature film or television series as the producer thereof, and to any sequel thereto."

In the suit, Threshold also contends that its rights to the series run far deeper than simply being able to make MK-based moving pictures.

"The Mortal Kombat franchise, as it stands today, is far more a creation of Threshold and Kasanoff than of Midway," the suit states. "Midway's creative input was almost entirely limited to the videogames. On their own, the videogames provided only minimal back-story and mythology, and only flat, 'stock' characters with virtually no character development. ... Threshold was responsible for transforming each of the pattern or 'stock' characters present in the underlying Mortal Kombat video game from an unprotectable idea into a fully-realized, completely-delineated and independently copyrightable expression. ... Each such character represents a separate, protectable, derivative work for which the copyright is owned by Threshold."

Threshold submitted a list of more than 50 Mortal Kombat characters for which it claimed the copyright, including Liu Kang, Sub-Zero, and Scorpion. In fact, the list included every character to appear in the games through Ultimate Mortal Kombat 3 (except for MKII boss character Kintaro), and a majority of Mortal Kombat 4's roster as well. The company also claimed to be in the process of making a third feature film in the series, with a script, talent, and shooting locations already in the works for the production.

After the first Mortal Kombat movie (which Kasanoff helped produce) proved to be a financial success--Threshold said the film's worldwide theatrical take was $122 million off a budget of just $25 million--the production company pumped out a number of follow-up projects in quick succession. There was a feature-film sequel, Mortal Kombat: Annihilation, the Saturday-morning cartoon Mortal Kombat: Defenders of the Realm, the TV series Mortal Kombat: Conquest, and even a touring stage show.

However, Kasanoff's filmography has not been limited to Mortal Kombat spin-offs. Among his production credits are dozens of films and TV shows, including Strange Days, True Lies, Ghoulies III: Ghoulies Go to College, C.H.U.D. II, and the 1989 Corey Haim-Corey Feldman body-switching teen comedy Dream a Little Dream.